Around the world, regulators are trying to tackle the trillion-dollar elephant in the room: the digital asset market. Because crypto is a nascent industry that currently exists largely outside of legal frameworks, it is still in murky waters, and those in the industry, and outside of it, apparently want clear guidelines and clarity moving forward. A proposed crypto bill, sponsored by US Senators Cynthia Lummis, Republican of Wyoming, and Kirsten Gillibrand, Democrat of New York, aims to install guide rails around the digital asset space. The 69-page bipartisan bill is comprehensive, addressing many corners of the crypto markets. Some of the most notable aspects of the proposal are:
“This bill tries to do everything, which may be its biggest impediment.” Christopher LaVigne, Co-Chairman of Crypto Practice, Withers
Make crypto transactions of $200 or less tax-free. Define guidelines to differentiate cryptocurrencies as commodities or securities (most would fall into the category of commodities, according to the bill). Backing stablecoins with a 1:1 currency, moving toward “100% reserve, asset type, and detailed disclosure requirements for all payout stablecoin issuers.” Grant the US Commodity Futures Trading Commission exclusive spot market jurisdiction over cryptocurrencies defined as commodities. Mark the US Securities and Exchange Commission and the CFTC as the main gatekeepers of the digital asset industry. “The bill is important as it is a step in the right direction for legislation and the definition of ‘crypto,’ what is a ‘crypto asset,’ and what regulation will look like,” Nick Donarski, founder and CTO, told TechCrunch. from ORE System. . “But at the same time, the bill, like other crypto-related bills, is more likely to be split to gain enough support to pass.”
Empower the CFTC
“There’s a lot of color here and it’s quite exciting,” Ken Goodwin, director of regulatory and institutional affairs at the Blockchain Intelligence Group, told TechCrunch. Giving the CFTC oversight of most digital assets sets a precedent and gives the agency more validation, he said. Goodwin worked on Wall Street for more than 20 years and has spent the last eight years in the blockchain space. Even with his background in both traditional finance and crypto, he said he is surprised by the CFTC’s positioning on the proposed bill. “I would never suspect [CFTC] really be at the forefront of this; I thought the SEC would be the regulator on this,” Goodwin said. “Even if this bill doesn’t pass, people will look to the CFTC for guidance.”
